Question 1

charges for some other company's safe deposit box were posted to your account

Accepted Answer

A)  added to the company's books
B)  subtracted from the company's books
C)  added to the bank statement balance
D)  subtracted from the bank statement balanceE) All of the above
F) A) and C)

Question 2

Match the following elements of internal control:
-control procedures

Accepted Answer

A)  provides reasonable assurance that business goals will be achieved
B)  used by management for guiding operations and ensuring compliance with requirements
C)  overall attitude of management and employees
D)  used to locate weaknesses and improve controls
E)  identify, analyze and assess likeliness of vulnerabilitiesF) A) and E)
G) B) and E)

Question 3

A $135 petty cash fund has cash of $18 and receipts of $120. The journal entry to replenish the account would include a

Accepted Answer

A)   credit to Petty Cash for $120
B)   debit to Cash for $120
C)   credit to Cash Short and Over for $3
D)   credit to Cash for $102E) A) and B)
F) B) and D)

Question 4

The debit recorded in the journal to reimburse the petty cash fund is to

Accepted Answer

A)   Petty Cash
B)   Accounts Receivable
C)   Cash
D)   various accounts for which the petty cash was disbursedE) B) and C)
F) All of the above

Question 5

For each of the following, explain whether the issue would require you to prepare a journal entry for your company, assuming any original entry is correct. If an entry is required, please include it as part of your answer.
(1) The bank recorded your deposit as $91 rather than the actual amount of $191.
(2) Two outstanding checks amounted to $450.
(3) Company check number 538 for postage was recorded incorrectly by the company bookkeeper as $50 instead
of $59.
(4) The bank paid a check for $500 after the company had issued a stop payment and voided the check.
(5) An EFT deposit was made by one of the company's customers, Atlas Design, for merchandise received. The
sale had previously been recorded when shipped and was equal to the payment amount of $125.

Accepted Answer

(1) If you recorded the deposit correctl...

Question 6

A minimum cash balance required by a bank is called

Accepted Answer

A)   cash in bank
B)   a cash equivalent
C)   a compensating balance
D)   an EFTE) B) and C)
F) A) and B)

Question 7

An example of good internal controls over cash payments is the taking of all cash discounts offered.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following reflects a weak internal control system?

Accepted Answer

A)   all employees are well supervised
B)   a single employee is responsible for comparing a receiving report to an invoice
C)   all employees must take their vacations
D)   a single employee is responsible for collecting and recording of cashE) A) and C)
F) B) and C)

Question 9

Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.

Accepted Answer

A) True 
 B)False

Question 10

Why would a bank require a company to maintain a compensating balance?

Accepted Answer

Usually a compensati...

Question 11

EFT deposit from a customer

Accepted Answer

A)  added to the company's books
B)  subtracted from the company's books
C)  added to the bank statement balance
D)  subtracted from the bank statement balanceE) B) and C)
F) A) and C)

Question 12

outstanding checks

Accepted Answer

A)  added to the company's books
B)  subtracted from the company's books
C)  added to the bank statement balance
D)  subtracted from the bank statement balanceE) A) and B)
F) A) and C)

Question 13

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Accepted Answer

A) True 
 B)False

Question 14

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

Accepted Answer

A) True 
 B)False

Question 15

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

Accepted Answer

A)   accounting controls
B)   cash controls
C)   FASB controls
D)   GAAP controlsE) A) and C)
F) B) and C)

Question 16

What are the processes and procedures a company uses to safeguard its assets, process information correctly, and ensure its compliance with laws are regulations called?

Accepted Answer

A)   Sarbanes-Oxley Act
B)   fraud prevention control
C)   internal controls
D)   external controlsE) B) and D)
F) C) and D)

Question 17

The following items may appear on a bank statement:
 1.NSF check
2.EFT deposit
3.Service charge
4.Bank correction of an error from recording a $300 deposit as $30.
Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account.  Use the following format:

Accepted Answer

The answer of The following items may appear on a...

Question 18

The cash account in the company's ledger is a(n)

Accepted Answer

A)   asset with a normal debit balance
B)   asset with a normal credit balance
C)   liability with a normal debit balance
D)   liability with a normal credit balanceE) All of the above
F) A) and B)

Question 19

List the principal advantages of electronic funds transfers.

Accepted Answer

•	EFTs cost less than receiving cash pay...

Question 20

A $200 petty cash fund has cash of $20 and receipts of $177. The journal entry to replenish the account would include a credit to

Accepted Answer

A)   Cash for $20
B)   Cash Short and Over for $3
C)   Petty Cash for $190
D)   Cash for $180E) A) and D)
F) C) and D)

Exam 7: Internal Control and Cash

Correct Answer
verified

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Correct Answer
verified

Which one of the following reflects a weak internal control system?

Correct Answer
verified

List the principal advantages of electronic funds transfers.

Correct Answer
verified
• EFTs cost less than receiving cash pay...
View Answer

A $200 petty cash fund has cash of $20 and receipts of $177. The journal entry to replenish the account would include a credit to

Correct Answer
verified

EFT deposit from a customer

Correct Answer
verified

A minimum cash balance required by a bank is called

Correct Answer
verified

The debit recorded in the journal to reimburse the petty cash fund is to

Correct Answer
verified

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

Correct Answer
verified

Correct Answer
verified
(1) If you recorded the deposit correctl...
View Answer

Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.

Correct Answer
verified

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

Correct Answer
verified

A $135 petty cash fund has cash of $18 and receipts of $120. The journal entry to replenish the account would include a

Correct Answer
verified

Why would a bank require a company to maintain a compensating balance?

Correct Answer
verified
Usually a compensati...
View Answer

outstanding checks

Correct Answer
verified

Match the following elements of internal control: -control procedures

Correct Answer
verified

The cash account in the company's ledger is a(n)

Correct Answer
verified

An example of good internal controls over cash payments is the taking of all cash discounts offered.

Correct Answer
verified

What are the processes and procedures a company uses to safeguard its assets, process information correctly, and ensure its compliance with laws are regulations called?

Correct Answer
verified

charges for some other company's safe deposit box were posted to your account

Correct Answer
verified

Exam 7: Internal Control and Cash

Correct AnswerverifiedShow Answer

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Correct AnswerverifiedShow Answer

Which one of the following reflects a weak internal control system?

Correct AnswerverifiedShow Answer

List the principal advantages of electronic funds transfers.

Correct Answerverified• EFTs cost less than receiving cash pay...View AnswerShow Answer

A $200 petty cash fund has cash of $20 and receipts of $177. The journal entry to replenish the account would include a credit to

Correct AnswerverifiedShow Answer

EFT deposit from a customer

Correct AnswerverifiedShow Answer

A minimum cash balance required by a bank is called

Correct AnswerverifiedShow Answer

The debit recorded in the journal to reimburse the petty cash fund is to

Correct AnswerverifiedShow Answer

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

Correct AnswerverifiedShow Answer

Correct Answerverified(1) If you recorded the deposit correctl...View AnswerShow Answer

Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.

Correct AnswerverifiedShow Answer

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

Correct AnswerverifiedShow Answer

A $135 petty cash fund has cash of $18 and receipts of $120. The journal entry to replenish the account would include a

Correct AnswerverifiedShow Answer

Why would a bank require a company to maintain a compensating balance?

Correct AnswerverifiedUsually a compensati...View AnswerShow Answer

outstanding checks

Correct AnswerverifiedShow Answer

Match the following elements of internal control: -control procedures

Correct AnswerverifiedShow Answer

The cash account in the company's ledger is a(n)

Correct AnswerverifiedShow Answer

An example of good internal controls over cash payments is the taking of all cash discounts offered.

Correct AnswerverifiedShow Answer

What are the processes and procedures a company uses to safeguard its assets, process information correctly, and ensure its compliance with laws are regulations called?

Correct AnswerverifiedShow Answer

charges for some other company's safe deposit box were posted to your account

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
• EFTs cost less than receiving cash pay...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
(1) If you recorded the deposit correctl...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Usually a compensati...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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